Call it the incredible shrinking grocery chain. Albertson's LLC runs about 190 Albertsons supermarkets in Arizona, Arkansas, Colorado, Florida, Louisiana, New Mexico, and Texas. That's all that remains of what was once the nation's #2 supermarket operator with about 2,500 stores. Stung by competition, the firm sold itself to a consortium that included rival grocer SUPERVALU, drugstore chain CVS, investment firm Cerberus Capital Management, and Kimco Realty for about $9.7 billion in 2006. SUPERVALU and CVS cherry-picked the company's best supermarket and drugstore assets. Subsequent closings and divestments, including 132 stores in Northern California and most of its Florida locations, further shrunk the firm.
The chain's recent history has been marked by total retreat from some markets, including California and Utah, and big cutbacks in others, such as Colorado, Florida, and Texas. In 2012 Albertson's closed 13 of its 17 stores in Florida, following the sale of three of its supermarkets in Central Texas to local rival H-E-B in 2011. The sale followed the closing of seven stores in Texas in early 2011. Those closings, all in the Dallas-Fort Worth area, left Albertson's with about only 80 stores in Texas.
Given its protracted retrenchment, it came as a surprise when in February 2010 the company made an unsolicited $290 million bid for Arizona-based Bashas. Family-owned Bashas rejected the offer as insufficient, but Albertsons says it intends to pursue Bashas anyway as the combination of the two chains would create a stronger competitor to market leaders Frys Food and Drug and Wal-Mart in the Arizona market. Albertsons operates about 40 stores in Arizona. – less